&quot;Virgin America's top executive denied Thursday that a foreign entity is holding more than 25% of the carrier's voting shares, and he insisted the fledgling airline remains in compliance with U.S. citizenship rules despite new assertions to the contrary by competitor Alaska Airlines.&quot; That's from The Associated Press, one of several news outlets updating us on the latest flap about whether the carrier is violating U.S. foreign-ownership rules. AP notes that &quot;under U.S. law, foreign ownership in a U.S. air carrier is limited to 25% of the voting interest in the carrier.&quot;

Of course, that's a big issue –- not only for Virgin America, but also its competitors. &quot;At issue,&quot; AP writes, &quot;is whether … Virgin America will get to keep its U.S. certification and be able to keep flying as a U.S. carrier.&quot; If it loses that certification, the carrier would have to suspend operations, at least temporarily. What's prompted the latest controversy? AP writes Alaska Airlines on Thursday asked federal regulators to &quot;promptly issue an order tentatively finding that Virgin America no longer qualifies as a U.S. carrier. It cited a Wall Street Journal story earlier this week, which stated that U.S.-based investors in Virgin America had exercised their rights to sell back their almost 77% of the start-up carrier's capital to the London-based Virgin Group.&quot;

The Journal's story, which relied on anonymous sources, went on to say no U.S. investors have been lined up to replace the shares alleged to be in question. Alaska Air, of course, asserts that might mean Virgin America is now essentially owned by Britian's Virgin Group. If true, that obviously would violate U.S. law.

Regardless, the situation doesn't appear to be black-and-white. Forbes.com writes &quot;a spokeswoman for Virgin America refused to comment on the transaction but told Forbes that the airline, which is privately held, is still 'U.S.--owned with U.S. ownership of over 76% of the voting stock. None of the structure has changed.' &quot; Perhaps most at the heart of the current situation, Forbes writes &quot;under the agreement, the two hedge funds may have received the return of their capital plus the 8% while maintaining voting control in order to keep the airline in compliance with the law.&quot;

As for Alaska Airlines, it says it filed its request to &quot;ensure all airlines are held to the same standard of compliance with U.S. law, and we hope the DOT acts quickly to address the issues surrounding Virgin's equity ownership and actual control.&quot; However, AP notes that Alaska and other rivals &quot;would stand to gain if Virgin America, which flies mainly transcontinental routes, were to cease operations temporarily or permanently.&quot;

Alaska Air officials say that the company's rivalry with Virgin America has nothing to do with the request. &quot;There’s a cost of capital,&quot; Alaska Air spokeswoman Caroline Boren tells Forbes. &quot;If you have the opportunity to tap into a wider market for capital that can lower a carrier's costs.&quot; According to Forbes, she asserts that Virgin has –- on occasion -– priced flights below the cost of fuel on routes where Alaska and Virgin go head-to-head. &quot;It's a very competitive market and we've matched fares in every case. Competition is healthy and good but unfair competition is not.&quot; Stay tuned…

Wolfgang Mayrhuber, president of Lufthansa, is simply different. At a time when nearly all of his peers are lamenting their sort, when the CEO of IATA is on the verge of a nervous breakdown, when the recession is mercilessly gaining ground, Mr Mayrhuber presents a 2008 annual report which is enviable to say the least, and even unique in its genre. To start with, he candidly announces that offered capacity this year will decrease by 0.5% at the most.
Coincidentally, Air France-KLM has announced a contraction of its offer amounting to 3.4% for the summer season, soon to open. And it looks worse for domestic routes, where Air France will reduce its offer by 6.4%.
Is some sort of double standard operating? This is hard to understand, if we forget that Germany has been less hard hit by the economic and financial crisis for the moment. But this explanation is too succinct, and therefore unsatisfactory.

Boeing filed its proxy statement Friday, which details how much senior executives were paid in 2008.

CEO and Chairman Jim McNerney made about 6 percent more in 2008 -- $1.9 million. But his cash bonus fell to $1.5 million, down 65 percent from $4.3 million in 2007.

McNerney's total compensation last year, which includes the values for stock and option awards and change in pension value, was nearly $19 million, about the same as in 2007, according to the proxy filing.

Separately, Boeing provided reporters with what it called an overview of McNerney's "take home pay.''

The highlights from that overview:

-- Salary: $1.9 million, up about 6% from $1.8 million for 2007.

-- Cash bonus, based on 2008 performance: $1.5 million, down 65% from 2007's $4.3 million

-- Long-term incentive bonus, based on the company's cumulative performance for 2006, 2007, and 2008: $4.6 million. "McNerney asked the board of directors to weight 2008's results more heavily in the calculation of his payout, resulting in a lower amount than he was otherwise eligible for. This was the first payout under the long-term plan, so there's no comparable 2007 figure. There's also no guarantee of future payouts."

-- Value of stock and options that vested during the year: $6.6 million, down about 14% from $7.6 million in 2007.

-- Other compensation, including use of company airplanes (required by company policy for the CEO), car and driver, and financial counseling and tax preparation services: $846,057, down 12% from 2007's $966,251.

-- Total "take home" compensation: $15.4 million, up from $14.7 million for 2007. The increase results from the first payout of Boeing's long-term incentive plan as detailed above.

Boeing, in the summary for reporters, said the "take home" compensation listed above differs from what's in the proxy's summary compensation table. "That's because the values for stock and option awards, and change in pension value, that are part of the proxy's total column aren't real compensation values. Rather those are accounting costs and an actuarial present value calculation that the company must report. Therefore, for purposes of discussion, we present the CEO's take-home pay, which is generally closer to what people think of when they think about executive compensation."

Boeing at risk of losing more 787 orders
Airline says it doubts 'quality' of Dreamliner

By JAMES WALLACE
P-I AEROSPACE REPORTER

Because the number eight is considered lucky in China, The Boeing Co. waited to name its 787-8 until it could also announce at the same time a huge order for the Dreamliner from six Chinese airlines.

Now, one of those Chinese carriers that ordered the plane in 2005, Shanghai Airlines, reportedly feels the first batch of 787s for customers won't measure up.

The Dreamliner doesn't &quot;fully meet the quality that Boeing touted earlier,&quot; Zhou Chi, chairman of Shanghai Airlines, said at a shareholder meeting Friday in Shanghai, according to Bloomberg News. He said the airline may cancel or postpone delivery of part of its order for nine 787s.

Boeing would not comment about any talks that may be under way with any of its 787 customers. The 787 is two years late, and so far this year two customers have already canceled a total of 31 orders.

It is not clear what Zhou meant by 787 &quot;quality&quot; concerns.

But airlines such as Shanghai that are scheduled to receive the first planes starting in early 2010 are worried about weight problems that could rob the 787 of range and payload. A heavier plane would not be able to carry the same number of passenger as far as a lighter plane, and it would burn more fuel.
----------------
Boeing has been trying to get extra weight out of its 787 for several years during the design and early production phase.

Last year, one of Boeing's biggest customers was critical of the 787 weight gain. Stephen Udvar-Hazy, founder of International Lease Finance Corp., which has ordered more 787s than any other customer, said in an interview that weight gains by the 787 would limit its range.

Boeing subsequently acknowledged that it had cut its range forecast for the first Dreamliners that will be delivered to customers.

It's expected that the upcoming 787 flight test program will help engineers determine where more weight can be trimmed. The first six planes will be used for the flight test leading to certification of the plane next year to carry passengers.

&quot;We have acknowledged that the first airplanes will weigh more than we would like,&quot; a Boeing 787 spokeswoman said Friday. &quot;The first airplane that will provide us with a meaningful weight is airplane No. 7 and we won't weigh that for some time.&quot; That plane will be the first Dreamliner delivered to All Nippon Airways.

Shanghai Airlines is supposed to get the 10th 787, which would be the fourth production plane, according to Flight International magazine. Chinese airlines are scheduled to receive half of the first 20 Dreamliners. The magazine quoted an industry source Friday as saying all six Chinese airlines that have ordered the Dreamliner are talking to Boeing about revised delivery schedules because of &quot;payload reasons.&quot;

&quot;We are working very closely with our 787 customers to understand their evolving fleet requirements,&quot; the Boeing spokeswoman said in an e-mail. &quot;But, as a matter of long-standing policy, Boeing does not comment on its discussions with customers.&quot;

A Reuters reporter who was at the Shanghai Airlines shareholders meeting quoted Zhou as saying the airline was negotiating with Boeing about whether to accept one 787 previously ordered.

A reporter from Dow Jones quoted the chairman as saying the airline might cancel the first 787 and would certainly delay its delivery.

U.S. Rep. John Murtha, D-Penn., is a pushing a proposal to buy planes from both manufacturers as a means to break a political stalemate between the two powerful defense contracting teams. That's an idea staunchly opposed by Defense Secretary Robert Gates, who said a split order would be inefficient, impractical and a waste of money.

But Murtha, the influential chairman of the House subcommittee that controls the Pentagon's purse strings, said he intends to add an earmark to this year's supplemental defense spending bill that would pay for a split buy.

Murtha said his plan would "get the planes sooner" by doubling the rate of production to two planes per month. He said that, as an incentive to competition, the team that offers the best deal to the Air Force could get a bigger piece of the proposed 179-plane order.
APRep. John Murtha said he's looking to jump-start the Air Force tanker program. "There's nothing more related to the war than tankers," he said Thursday in Washington, D.C.

"We hope we can work it out," Murtha said Thursday at a defense conference in Washington, D.C. "But this may all fall by the wayside."

Top Air Force officials have said they hope to re-open competition for the potential $40 billion tanker contract as early as next month, with a decision by early 2010.

Murtha said failure to reach a compromise could delay the tanker program by another two to three years, because the losing bidder is sure to protest the decision.

WASHINGTON, March 12 (Reuters) - A measure that funds the wars in Iraq and Afghanistan could jump-start the long-delayed purchase of U.S. Air Force aerial-refueling planes, said a lawmaker who holds Pentagon purse strings.

"There's nothing more related to the war than tankers," Rep. John Murtha, who heads the House of Representatives' Appropriations Defense subcommittee told reporters Thursday.

Murtha said he and Sen. Daniel Inouye, chairman of the Senate Appropriations Committee, saw eye to eye on dividing the lucrative market between rival suppliers, despite Pentagon opposition on cost grounds.

Uncertainty exists over how airport fire departments will fight fires in the new composite commercial airliners, indicating that the manufacturers still have educating to do.
-------------
And Boeing told the airport authorities at Everett, WA’s, Paine Field, where the 787 will perform its flight testing, that there isn’t any effective difference between a composite airplane and a traditional one.
------------------
“This will fundamentally change everything from strategy and tactics and equipment,” Davis said. “It strikes me that we’re definitely going to have to train to and equip ourselves differently. I’ve studied fires in military composites. This (B-2A crash) is the first of an all-composite airplane; usually there are just parts that are composites.”

--------------------------
Among our findings in testing using FAA-approved methodologies were:
• The composite materials used for the 787 do not propagate an in-flight fire.
• The fuselage skin is an excellent fire barrier, and resists flame penetration far longer than an aluminum fuselage
• The toxic gas levels produced in a post-crash fire scenario are similar for both a composite fuselage and an aluminum fuselage
• There was no prolonged burning or re-ignition of the composite skin after tests were completed.
--------------------------------

The focus on the current debate is the sheer volume, the entire fuselage, of composites on the 787, and whether firefighters, passengers and anyone downwind might be at risk of burn rates and toxicity associated with composites.

The issue of a large airplane composite fire took on new meaning with a real-life example, rather than a theoretical test, when the B-2A bomber crashed and burned on take-off at a US military base in Guam. The billion dollar aircraft stalled in an extreme nose-up attitude right after take-off and pancaked into the ground.

----------------------
Boeing was a sub-contractor on the B-2 program, giving the company intimate knowledge of composites.

The B-2 accident was the first of a large composite airplane; the B-2’s empty weight is 158,000 lbs (slightly smaller than a Boeing 767-200) vs 252,000 lbs for the 787-8, 796,000 lbs for the A380 and 382,500 lbs for the A350-800.

The Air Force’s post-impact fire analysis reports that firefighters began pouring water the on the B-2 bomber less than three minutes after the accident. Within 30 minutes, every fire fighter on the base—53 of them—and all apparatus was on the scene. Four fire trucks were brought in from off base. The fire burned for 4-6 hours and, in the words of the report, the “complete combustion event did not end until day two and possibly day three.”

------------------

The large amount of water required to put out the fire on the B-2 means airports have to rethink how they provide water supplies for firefighting, said Davis.

“Water supply and agent conservation will be at a premium for fighting a composite aircraft. They went through tons of water, 83,000 gallons of water,” Davis said. “That’s a huge amount of water. Most every airport would have to have one of two things: hydrants throughout the airport or a very, very large Airport Resource Firefighting apparatus (ARF),” a truck with extremely large water capacity, and a very sophisticated shuttle operation.

The Air Force’s report concluded that “There was a change in the nature of burning as JP-8 was consumed. The aircraft structure continued to burn. The fire scenario could be explained in four distinct combustion stages:
1) 20-30 minutes for the JP-8 flaming combustion.
2) 4-6 hours for aircraft structure flaming combustion which transitioned to intermittent flare up at random locations across the aircraft.
3). 24 hours into the intitial response, cool down was taking place through-composite-thickness with indications of deep-seated smoldering and
4) 48 hours into the initial response, the final cool-down stage was reached with a hint of light smoke being released.”
------------------------------
Hanson said that one of the things that emerged from this crash was the acquisition of a snozzle, a fire truck with a 50 ft articulating boom with hardened steel tip and titanium barrel that can penetrate the skin of the aircraft when the barrel is extended.
Penetrating the skin of a metal or composite aircraft requires high pressure water. The two snozzles used by LAX are capable of 25,000 psi. A standard metal aircraft, such as those in service today, require 5,000 psi to penetrate the skin. Hanson says the GLARE composition used on portions of the A380 requires 6,000 psi and Boeing advised its 787 fuselage requires 8,000 psi. GLARE is a combination of aluminum and composite material.

Once the skin is penetrated, the snozzle’s barrel can be inserted into the airplane, discharging 250 gallons per minute, enough to hold the fire until firefighters can get the hand lines in.
---------------
The B-2 fire reached temperatures of 900-1,700 degrees, depending on the location, the Air Force concluded. JP-8 fireballs can reach temperatures in excess of 2,000 degrees.

The Air Force concluded that the “length of time needed to extinguish the fire and cool the aircraft was unexpected.” The report noted that the lengthy duration required trucks to leave the scene for water, “interrupting the suppression or cool-down process, allowing heat to penetrate and burn through thickness (layer-by-layer). Without having adequate water pressure or a water source near by, the structure was not continuously cooled through composite thickness….”

The Air Force explained that the nature of composite construction lay behind the lengthy fire and smoldering. The layer-by-layer manufacturing to the desire shape and thickness, made up of resin-coating fibers, causes the flames to burn through layer-by-layer. “Cooling or flame suppression occurs in the same manner.”

“During the initial response, the aircraft composite material concern is the resin, not carbon fiber,” the Air Force said.

Davis, the Denver fire chief, expressed concern about the particulates emitted in a composite fire.

“The smoke that comes off a composite fire is extremely toxic. The difference between [metal and composite fires] is you also get those fibers. When the composite is degraded by the fire, it releases physical fibers that become airborne and are extremely carcinogenic. It’s as bad or worse than asbestos,” Davis said.

LAX’s Hanson also compared composite fibers with asbestos and said LAX firefighters have to treat composites within the department’s Standard Operating Guidelines.

The Air Force also noted that “aircraft composite fires differ from metal aircraft fires because they add fuel to the fire by increasing the fuel load. In order to extinguish a composite fire, firefighters have to consider composite thickness and maintaining a continuous supply of agent.” The Air Force recommended specific composite fire fighting training.

------------------
The Federal Aviation Administration imposed special conditions on the 787 testing that Boeing has to meet in order to certify the 787. Among them are conditions relating to composite burning and fire.

In response to questions for this article, the FAA said it is “aware of the B-2 accident, although as is often the case with accidents involving military aircraft, we do not know what payload or other items were carried on the airplane that may have contributed to the sustained fire.”

“The standards that the FAA has established for the 787 are intended to provide sufficient time for occupants to safely evacuate the airplane following an emergency situation. FAA research shows that the composite fuselage material significantly increases the time it takes for a post crash fire to burn through to the interior, which increases the time for occupants to evacuate before the exterior fire can endanger them.”

As for environmental and fire fighting issues, the FAA says this is beyond its scope for certification.

--------------------------
Airbus, like Boeing, was asked February 5 by Leeham.net to respond to the B-2A USAF post-impact fire analysis. We’re still waiting for a response.

Second weddings are common. Second funerals are not. But we might be close to seeing one. At the end of January, Bombardier passed its objective date for converting Lufthansa’s curious CSeries Letter of Interest into something tangible. It has now been eight months since the CSeries was firmly launched, and yet there are no firm orders. This is disconcerting, not just for the program, but for much broader reasons too.

First, some history. The first CSeries funeral was a joyous event. Introduced in 2004, the first CSeries was less an aircraft and more a generic and cynical effort to tap into government funding from Ottawa and Quebec. A poster child for the evils of government-funded pipedreams, the proposed plane re-defined mediocrity, with a design owing much to Fokker decades ago. It was wisely shelved in January 2006.

The second CSeries was a different creation. The program managers decided that working for a living was actually a good idea. They quit watching daytime TV and started watching for key technological enablers. They found some, most notably Pratt & Whitney’s Geared Turbofan (now the eco-friendly sounding PurePower). They also went with a composite wing, making the CSeries the first narrowbody with a composite primary structure. Composites and aluminum-lithium are 70% of the airframe. It was firmly launched at Farnborough 2008, and even though this was the first aircraft launch I’ve ever heard of without a firm order, Teal put the new plane in its ten year production forecast. It stayed there for six months. It’s out now. Like Captain Oates of Captain Scott’s Antarctic expedition, it may be out for some time.

The CSeries isn’t dead. But there are obvious reasons why it’s taking off like a senile chicken. Oil was pushing $150/bbl per month last July, but is now about $40. This has drastically changed the risk/reward equation for any airline looking at new technology. There’s less of a pressing need to invest in fuel efficient equipment. Falling traffic makes airlines even more cautious. Bombardier’s pitiful IR&D spending record and a foolish and/or desperate CSeries production plan compound these problems, but they’re secondary factors compared with the big issues.

A second CSeries funeral would be chilling for an industry that’s already skittish, but it could be part of a big wave of chilliness. A struggling Hawker Beechcraft has shelved its Hawker 450. It may shelve its Premier II as well. Cessna, while healthy, may find it needs to slow down its Columbus program due to parent company Textron’s severe cash problem. Textron’s near-disastrous financial situation will also likely affect new civil helicopter development at Bell. The Mitsubishi RJ has morphed from an ambitious 787-related technojet to yet another 70-seat metal tube. As for the big guys, Airbus and Boeing are postponing their new narrowbody studies, with talk of 2020 service entries. Most of all, the A350XWB development budget is the biggest cause for concern as Airbus enters an industry downturn.

It’s easy to see how new products get hurt by a downturn. As production rates soften (or in the case of business jets, as rates implode) OEMs work to cut any variable costs they can. This includes engineering and business development personnel and new product CAPEX.

Across the Atlantic, the troubled A400M might die the worst European aircraft death since the 1960s.
-----------------------------If the CSeries dies again, the second funeral wouldn’t be at all like the first. It would be an occasion for genuine concern and perhaps even mourning.